Letter to the Speaker on the Panama Canal and the Panama Railroad Company.

[Released February 1, 1950. Dated January 31, 1950]

Dear Mr. Speaker:

I am transmitting herewith the report and recommendations of the Bureau of the Budget with respect to the organization and operations of the Panama Canal and Panama Railroad Company. The report was prepared pursuant to House Report No. 1304, 81st Congress, 1st Session.

The recommendations of the Bureau of the Budget have my approval except the recommendation with respect to the transfer of supervision of the Panama Canal from the Secretary of the Army to the Secretary of Commerce. I desire to give further study to that recommendation, particularly in connection with plans to carry out the proposals of the Commission on Organization of the Executive Branch of the Government which are now under consideration.

As preliminary steps to facilitate the recommended reorganization of the Panama Canal and the Panama Railroad Company I have today issued two executive orders. The first delegates to the Governor of the Panama Canal authority to determine the internal organization of the Panama Canal. The second order transfers certain business operations from the Panama Canal to the Panama Railroad Company. These initial transfers will simplify and facilitate the early transfer to the Company of all business operations of the Panama Canal.

While several of the recommendations can be implemented by executive order, legislation is required to (1) authorize transfer of the Panama Canal to the Panama Railroad Company; (2) change the name of the Panama Railroad Company to Panama Canal Company; (3) authorize the Company's board of directors to establish toll rates, subject to the President's approval; (4) permit the Company to retain and utilize toll revenues; and (5) authorize appropriations to the Company to cover losses which might result from changes in economic conditions. I recommend the enactment of such legislation.

It is believed that implementation of the Bureau of the Budget's recommendations will result in a more logical grouping of functions, provide a sounder basis for determining toll rates and other charges, facilitate operations, and, in general, promote the more effective administration of the Panama Canal enterprise.

Very sincerely yours,

HARRY S. TRUMAN

[Honorable Sam Rayburn, Speaker of the House of Representatives]